Aboitiz joint venture expects Davao bulk water project to start in July

ABOITIZ Equity Ventures, Inc. (AEV) and its joint
venture partner target to start in July the construction of a P12-billion bulk
water supply facility in Davao City, with the goal of providing services to the
area by end 2019, its finance chief said.

“The funding is ready. It’s really just
finalizing the permits. We want to make sure everything is set before we start
building,” AEV Chief Financial Officer Manuel R. Lozano told reporters on
Monday.

Apo Agua Infrastructura, Inc., a joint venture between AEV and JV Angeles
Construction Corp., in mid 2014 won the right to build the facility for the
Davao City Water District, but the project was delayed because of the lengthy
government permitting process.

Set to produce 300 million to 350 million liters of water per day, the project
will source water from the Tamugan River and require close to 50 kilometers of
pipes to reach the facility.

Mr. Lozano said the project is “not hard to build” except for the construction
of the road to the water treatment facility, which needed coordination with the
Department of Public Works and Highways.

“That’s why it takes time, because you need to get the right of way, you need
the permits, then some of those land conversion. So that’s gonna be another
issue,” he said.

Construction will take around two-and-a-half to three years and completed ahead
of the Aboitiz group’s end-2019 target operation date.

Asked about the firm’s decision to bid for the Davao project, Mr. Lozano cited
the need for accessible water supply in a region where 63% of consumers
depended on deep wells.

“The area of Davao really needs water... so they’ve always been looking for
more resources,” Mr. Lozano said.

POWER DEVELOPMENT
In the next 12 months, the Aboitiz group expects the completion of three major
power projects, which required investments of up to P59 billion.

By the fourth quarter this year, a 200-MW coal-fired power plant in Pagbilao,
Quezon is scheduled to be completed. The project is under AEV’s power
development arm Aboitiz Power Corp., whose unit Therma Power, Inc. partnered
with TPEC Holdings Corp. to form Pagbilao Energy Corp.

In Cebu, another coal-fired plant is being constructed by Therma Visayas, Inc.,
a joint venture of Aboitiz Power and Vivant Corp. It should be completed by the
first quarter of 2018. The plant has a capacity of around 300 MW.

The group’s 68-MW hydroelectric power plant project in Bukidnon through
AboitizPower’s unit Hedcor, Inc. is targeted for completion in the third
quarter of the year.

By the second quarter, AboitizPower’s joint venture through Aseagas Corp. is
set to finish the commissioning stage of an 8-MW biofuel plant, its first using
the technology.

“It’s a bit of a challenge because we’ve never done that kind of power plant,”
Mr. Lozano said. “But it’s a good start. We’ll probably have more of these
types of projects.”

The projects will bring AboitizPower’s total capacity to around 3,500 MW.

Mr. Lozano said AboitizPower was also looking into renewable resources as it
sees solar energy’s potential to become one of the main sources of power over
time.

“Aboitiz Power is looking for ways to scale this project,” he said, adding that
solar farms can be built immediately for the end user.

The group has a 60-MW solar power plant in San Carlos, Negros Occidental, which
became operational in March 2016.

Mr. Lozano said the group’s property arm Aboitiz Land, Inc. is interested in
putting up developments powered by solar rooftops.

“If those markets are open for rooftop-type of solar... this will reduce costs,
make it cheaper because [it] will be directed to the customers,” he added. -- Arra
B. Francia